CalPERS Generates 2.4% Return for FY 2015
California Public Employees’ Retirement System (CalPERS) returned 2.4% in fiscal year 2015 – ended June 30th, 2015. This was CalPERS’ worst performance since 2012 when it generated a 1% return. Listed equities were a major drag on performance, along with private equity. The pension giant had an internal goal of 2.5%, far below its targeted long-term pension return of 7.5%. At June 30th, CalPERS had a bit more than US$ 301 billion in assets. Other pensions globally have fared better. Japan’s GPIF, the largest pension in the world, earned 12% in the year ended March 31.
“Despite the impact of slow global economic growth and increased short-term market volatility on our fiscal year return, the strength of our long-term numbers gives us confidence that our strategic plan is working,” said Ted Eliopoulos, CalPERS Chief Investment Officer in a press release.
CalPERS is in the midst of a significant re-organization regarding its investment office. The pension system dropped hedge funds and is looking toward reducing alternative asset manager relationships – essentially halving them by 2020. CalPERS is also putting up its timberland assets for sale. Those assets generated a -0.3% return in FY 2015.
Asset Class Returns
|Asset Class||FY 2015 Return||Performance Against Benchmark|
|Public Equity||1.0%||(31) bps|
|Private Equity||8.9%||(221) bps|
|Fixed Income||1.3%||93 bps|
|Real Assets||12.4%||90 bps|
|1. Real Estate||13.5%||114 bps|
|2. Infrastructure||13.2%||932 bps|
|3. Forestland||-0.3%||(1,094) bps|
|Inflation Assets||-11.5%||147 bps|
|Total Fund||2.4%||(9) bps|
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